Future Fuels Initiative

The Future Fuels Initiative aims to boost Canada's annual ethanol production and use by four times (by 750 million litres). That could mean 25 percent of Canada's total gasoline supply would contain 10 percent ethanol. The program is jointly delivered by Natural Resources Canada and Agriculture and Agri-Food Canada. It is part of the Government of Canada's Action Plan 2000 on Climate Change.

The Future Fuels Initiative renews the National Biomass Ethanol Program (NBEP) to help overcome lender resistance to investing in ethanol plants because of uncertainty about excise tax policy. (Currently, there is an excise tax exemption on the ethanol portion of blended gasoline.), The NBEP provides for $140 million in contingent loan guarantees to encourage financing for new plants that produce ethanol from biomass such as plant fibre, corn and other grains. The loan guarantee program would come into effect only if all or part of the excise gasoline tax on ethanol were imposed before December 31, 2010.

The Future Fuels Initiative also adds $3 million over five years to provide market information to retail consumers. It provides for activities such as public education on fuel ethanol, analysis of fuel ethanol markets and producer economics and provides a liaison with provinces/territories and industries that are interested in ethanol plant expansion.